hi, everybody. welcome to the "the wall street journal report with maria bartiromo." i'm maria bartiromo. americans retirement crisis. are you saving enough to make your golden years shine? our conversation with one of our country's most important voices on retirement. and many call the most important banker in the world, jamie dimon. on the economy, housing and why he's hopeful. >> america has unbelievable talent. >> ten years later, is no child left behind working? has it improved the education system? a report are card on a controversial program and whether charter schools can make a difference. the "the wall street journal report with maria bartiromo" begins right now.

now maria bartiromo. >> here's what is making news as we head in to a new week on wall street. earning season is underway again with a mixed picture painted by two companies. it began with the traditional of dow component alcoa going first. they met expectations though though the revenue was better than expected. jpmorgan chase met expectations but the revenues fell short. i will be talking to the company's ceo jamie dienl coming up in the program. the markets got off to a sizzling start on the new year. by tuesday the dow reached a five-month high and it continued up later in the week. by thursday the s&p 500 had the best beginning of the year since 2006, mostly on easing worries in europe. the markets fell on friday. retail sales barely rose in deps up 1/10th of a% and less than

expected. the disappointing december number was due to heavy discounting in the holiday season. the federal reserve says if the economy continueses to improve the beige book, the study of regional economies showed moderate growth which has been improvingable isly in the manufacturing sector. don't worry you will be able to buy twinkies and wonder bread. hostess brands is declaring bankruptcy. they will continue to operate normally during chapter 11 proceedings. roger ferguson is the former vice chairman of the federal reserve and current ceo of tiaa-cref, leading retire temperature services provider. he says america is facing a retirement crisis and he is passionate advocate for retirement education. always wonderful to have you on the program. >> thank you for inviting me back. >> let me get your take on the broad economy. it feels like we have been seeing improvement. what's your take on the u.s. and global story right now?

>> the way with it feels is in substance the way it is. we are seeing a little improvement. as you probably know the fed's beige book came out recently and there were signs of improvement there. on the other hand there have been some disappointments. are retail sales growth was lower than expected. jobless claims are not showing consistent improvement week over week. i'd say where we are is where we have been for some time, uneven, slow, bumpy, recovery, but a recovery, nonetheless. >> most people are looking at europe as this wild card. do you see a decoupling, i hate to said that because we thought we were and realized we weren't in 2008 when the whole world was -- so u.s. versus europe is that the wild card, the impact of europe? >> there is uncertainty for sure. already elements of decoupling. u.s. seems to be moving ahead

and europe seems to be glowing down. their industrial production may be slowing. obviously what is happening in europe is the overhang of the debt crisis. before we put too much weight on the decoupling story we have to recognize markets are global. so uncertainty in europe can swing to the u.s. market. while it may show a little decoupling markets are not. the final point is europe is an important source of revenue for a number of multinational headquarters here in the u.s. >> let's talk about retirement. when you look at what is going on in the european countries and recognize what debt has done to these countries, really strapping them and then you look at the retirement situation. it is a crisis in the u.s., isn't it? >> there are three things that are driving it. one is demographics. baby boomers are getting older. last year was the first time baby boomers started to turn 65, the usual retirement age.

there is a baby boomer turning 65 every seven or eight seconds. all of this is taking place just as we are dealing with a financial crisis for sure. and the third is that retirement itself is changing. demographics aren't just that people are aging but people will be living longer in what we think of as retirement. if you put it together it is a toxic brew for people. >> it really is. it is scary. do you think the old ways of doing things are appropriate today? for example the 401(k)? i'm one of these people, i want to take it to the max and do the the match with my company. i sock away as much as i can every two weeks if i can. sometimes it is more than other weeks. a lot of people don't do that. >> you have the right attitude. >> is the 401(k) still appropriate for retirement? it. >> was never meant to be the primary retirement tool in america. it evolved that way as businesses pulled back on their

defined benefits plans. it fits in some ways that it is portable and tailored to the individual. on the other hand, many folks don't use it the right way. you do. putting in as much as you can. first signing up. many don't participate. taking advantage of the match. getting guidance on how much to save and having a good asset allocation and most importantly don't look at that as a pool of money you can pull out when you need it. >> what does the u.s. system need to do today to adapt to all of these change cans, the demographics, et cetera. >> there are a number of things. we have to rethink, repair and restart the retirement system recognizing the individual approach is helpful. we need to make sure it is a retirement system by giving people a chance to have retirement for life through an annuity option and making sure more participate through automatic enrollment. it needs to have an element of

financial literacy. a point we are passionate about. we have to make sure they take advantage of the right amount of diverse case and give them an example of what they will get at the nend terms of payout depending on what they save. >> what do you think individuals need to be doing to ensure a secure retirement? are there things they should be thinking about on a day-to-day, month-to-month basis? >> save, save, save. >> pay yourself first. >> pay yourself first. >> get over that $3 a day cup of coffee if you are a young person and by the time you are 65 that is $33,000. save $25 extra a week if you are 25 years old and with a reasonable return, you have $165,000 in your account. so save, save, save. second thing, think broadly about a long-term strategy. do not get swayed by the most recent headline. do not jump in and out of the

markets or try to time. your strategy should reflect who you are. how long do you expect to live? probably longer than you may imagine. what your job prospects are and risk appetite is. it has to start with participating in saving. if you don't do that you can't do the other things. >> wonderful to see you. >> thank you for having me on. >> roger ferguson of tiaa-cref. he is the banker overseeing $3 trillion in assets. jpmorgan chase dooim jamie dimon will be with us and offer his view of wall street and why he is bullish on the u.s. and ten years since no child left behind became the law of the land are we educating our way to a better economy? we'll be right back. [ male announcer ] the inspiring story of how a shipping giant can befriend a forest may seem like the stuff of fairy tales.

but if you take away the faces on the trees... take away the pixie dust. take away the singing animals, and the storybook narrator... [ man ] you're left with more electric trucks. more recycled shipping materials... and a growing number of lower emissions planes... which still makes for a pretty enchanted tale. ♪ la la la [ man ] whoops, forgot one... [ male announcer ] sustainable solutions. fedex. solutions that matter. forty years ago, he wasn't looking for financial advice. back then he had something more important to do. he wasn't focused on his future. but fortunately, somebody else was. at usaa we provide retirement planning for our military, veterans and their families. now more than ever, it's important to get financial advice from people who share your military values. for our free usaa retirement guide, call 877-242-usaa.

the head of the nation's largest bank says housing has bottomed. he says he sees brighter times for the united states. at a conference this week i spoke to the bank's ceo about where he sees the economy headed in the new year. >> i think in general the u.s. economy is a mild recovery but seems to be broad and strengthening. if you look at the sectors, small business, consumer, for the most part they are better than a year ago. we even think that housing is at or near the bottom if you look at rental supply and demand, we are hoping to have a good economy and jobs. >> you speak to a lot of ceos. are you seeing backlog in terms of plans to do deals iipo, what does your pipeline at jpmorgan chase look like? >> companies have a lot of money and wherewithal. like anyone else they worry.

they worry about the world, themselves they think they are okay. >> even wlt better data the bank stocks have been under pressure. your company lost $40 billion in market value in the last year. toward want to know what will turn it around. turn to europe. what is your recommendation to fix the euro debt crisis and get this volatility out of the -- >> europe is kind of a unique thing. i'd like to see europe solve its problems. i think the european union and euro itself is a great accomplishment of mankind. any country that says we want to see all countries be responsible and accurate. to do that it is retirement, work hours, competitiveness, et cetera. i think it is fair for them to say it is a government issue. i think it is fair for the government to say the ecb needs

to provide liquidity for italian sovereign debt. they have a lot of issues to work out and need to be done almost together and soon. i think the longer you wait the higher the risk if something goes wrong that you can't control. >> what is your view on what they have done so far in terms of the lending facility. >> the last thing they did three or four weeks ago, where they expanded the amount of clout to be used and if you have the clout you can borrow three years at low rates. i think it is -- it removed a lot of issues about liquidity at the banks. that issue was taken off the table by one move. the banks have been asked to raise capital and to do that they may have to sell assets and do certain things but one of the big ones was removed. >> let me get your take on the stress test. jpmorgan chase submitted its plan to the federal reserve. how does thank you do they come out on this. >> i don't agre with all of it

but i agree with the stress test. you should be able to look at jp morgan and say can you handle massive stress. it is 13% unemployment, home prices down 20%, equity markets down 50%, a catastrophe in the markets and europes and yes we can handle that and be well above the 5% tier one required. i'm hoping what it shows is the american banks, maybe an exception or two are well capitalized can handle extreme stress and one day hope to take it off the table. >> you come out of the fed, all is fine and you have plenty of capital, do you raise your dividend? >> it is a board level decision. we raised it last week and put it at a dollar. we told the world we'd expect to have regular, not huge increases but as a normal course. that is a small capital decision relative to other capital decisions. last year we brought back $8

billion in stock. we think we might do something like that this year. we hope to do that or more in 2012. we are not the people that buy stock at any price. we prefer to spend the money when the stock is cheap but may not be cheap by the time we have the opportunity to do that. >> do you expect the pressure to continue on markets in 2012? toward are nervous. >> toward may be surprised. when they are nervous, six months later they can open up wide. if you are a corporation you can easily raise money. we are doing $10 billion mortgages a month. we are doing $10 billion a month. doing a lot of credit cards, small business loans up 70% year to year. middle market loans as of september, up 18% year over year. we have seen real under lying growth. some are market share gains. competitors are seeing similar

numbers. >> you are the only ceo in your space to come out and talk about the demonizing of the industry. do you think the pressure on the industry would be different or less under a different administration? >> i'm not sure there should be pressure in the industry at all, whether republican or democrat. i wish they would have a rational collaboration on how to make the country grow faster and have jobs and more opportunity. we haven't had that. i don't know what is going to happen after the election. america has got unbelievable talents and strengths. we should be talking about those and making it even better and growing off of those to make the country grow again. >> are you going to support obama? >> i don't publicly support any candidates. i'm not allowed to. i'm barely a democrat. i will see when the time comes and i won't tell you. >> jamie, good to have you on the program. >> thank you. up next on the "wall street journal" report. testing and teaching the

students of the

>> hello. h heyhandsome.

ago this week in january, 2002, president bush sign td to law the sweeping education legislation known as no child left behind. introducing an era of increased student testing and increased teacher accountability. a decade removed, how are we doing when it comes to providing

equal, quality education to students of all income brackets? joining me is eva moskowitz, the founder of the success academy charter schools in new york city. good to see you. thank you for joining us. >> thank you for having me. >> this anniversary of no child left behind is an opportunity to look at the playing field and how children of lower income brackets are doing and how we, as a country, are providing in terms of education. how are we doing? >> all of the international studies indicate the country is not doing well. even our highest-performing students are doing worse than many other countries lowest performing students. >> why? >> we have a crisis on our hands. we have been delivering education the same way for a half century, and we have to move in to the 21st century. we have to have more rigorous standards, more accountability, while emphasizing critical thinking. >> i feel like we have been talking about account a long time. why aren't we getting it?

you operate nine schools in new york city. how does the charter school approach look at things? is it better than the traditional neighborhood schools in terms of the gap. >> we have a lot of freedom around teaching and learning. we don't have a 600-page teach evers/union contract that governs every detail of the school. we can say here's how we are going to organize our day and time and we hire the best and if for some reason we have a teacher who's not cut out to be a teacher we m.i.a. say to them, you need to find a different profession because at the end of the day the most important thing about a school is whether you have a highly effective teacher and don't forget highly effective principal. >> in terms of getting that teacher and principal, you have to have flexibility. do you think one of the biggest problems is the teachers unions.

>> it is part of the the problem but you have bureaucratic management. you have the worst of both worlds. huge districts that are far removed from the schools. i think the teachers union contracts are really a problem. they don't allow for the kind of flexibility. let me give you an example. in new york city, we have a teachers union contract that gives only one 50-minute prep period. at our schools we give teachers two to three prep periods a day and in exchange we expect them to be super well repaired to the teach the lesson. >> your teachers have exhibited super scores. are standardized tests future predictors of academic success? >> i would argue they are. i wouldn't want a school that only focused on testing because they are a low bar. you want to teach kids to think critically, mathically, scientifically. you want them to be great

writers but if kids don't do well on the test they will not do well in life. >> what about your board. tell me about the role of the private sector in the charter schools. >> we need the private sectors help. they are doing well. we have a lot to learn on how to organize and structure schools and we are grateful for the generosity, the charter movement in new york state doesn't get equal funding. the philanthropic community has allowed us to start up schools and innovate. >> there is another group that says it is impacting things and we don't like it in our neighborhood. you are going beyond harlem in new york and you have gotten pushback from parents in some areas. basically they are saying charter schools take away from traditional neighborhood schools. what do you say to that? >> it is often not the parents. it is the teachers union. they hire organizations like

acorn, they actually rent protesters. one has to be careful about where the opposition is coming from, but we had 9,000 parents apply to our schools last year for 900 spots. so we clearly have community support. >> the numbers tell the story right. there eva, sounds great. thank you for all that you are doing. appreciate your time. >> thank you. >> we will take a break and look at the news that will have an impact on your money and in happy hour news, america has bellied up to the bar and spoken. is there a new king of beer? the right insurance at the right price. the "name your price" tool, only from progressive. ready, aim, save! grrr! ooh, i forgot my phone! the "name your price" tool. now available on your phone. get a free quote today.

impact wool exports from new zealand, textile production in spain, and the use of medical technology in the u.s.? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 75% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. and it hasn't been going exactly as planned. cut. cut! [ monica ] i thought we'd be on location for 3 days -- it's been 3 weeks. so i had to pick up some more things. good thing i've got the citi simplicity card. i don't get hit with a fee if i'm late with a payment... which is good because on this job, no! bigger! [ monica ] i may not be home for a while. [ male announcer ] the new citi simplicity card. no late fees. no penalty rate. no worries.

for more on our show and our guests, check out our website and follow me on twitter and on google+. look for @maria bartiromo. now look at the stories that may impact your money this week. monday the observance of martin luther king junior's birthday. all u.s. markets are closed. a busy week for earnings season though. fourth quarter results from the financials on top of jpmorgan chase's numbers on friday, bank of america, american express, wells fargo and citigroup. microsoft, intel, google and general electric will also be reporting their fourth quarter. wednesday a look at inflation with the release of the producer price index. that tracks the cost of goods at the wholesale level. on thursday, the consumer price index is out. see if there is inflation at the

cash register. the king of beer takes a tumble for two decades. there is a new number two. coors light outsold budweiser by 1.5 million bottles to be the second best selling bud in america. anheuser-busch has seen volume declines in the last few years as customers are opting for light and lower calorie options. last year was the seventh straight year of growth for coors light brand. bottoms up. that will do it for us. thank you for joining us each week with. keep it right here where wall street meets main street. have a great week, everybody. i will see you next weekend. ♪ secondhand smoke affects everyone's health. it's not just irritating. it can cause heart disease and even death.

speak up about secondhand smoke. your health and the health of your family depend on it.